Good news for brand owners: parody exception does not justify registration of trademark

Germany

The German Federal Court of Justice has affirmed a decision of the Higher Regional Court of Hamburg ordering the owner of a trademark, which was to some extent parodying a well-known trademark, to agree to the deletion of its mark. The attacked trademark registration was found to be detrimental to the reputation of an older mark. The defendant could not rely on the parody exception, the Federal Court of Justice stated.

The appellant, a successful and well-known German sportswear distributor, owns, among other things, the following word-and-device mark, which contains the word 'Puma' and the image of a leaping feline:

The defendant registered the following word-and-device mark, which contained the word 'Pudel' (German for 'poodle') and the image of a jumping poodle:

The defendant used its trademark on clothes, as follows:

The appellant sought the deletion of the defendant’s trademark.

The Federal Court of Justice decided in favour of the appellant and ordered the defendant to agree to the deletion of its trademark.

The court found that the signs were not identical but, despite clear differences, showed similarities in accordance with German trademark law. Although the similarities were not strong enough to cause a likelihood of confusion between the signs, the success of the defendant’s product depended highly on the great reputation of the PUMA trademark. By using its trademark, the defendant thus exploited the distinctiveness and the reputation of the PUMA trademark to the detriment of the appellant.

With regard to the parody exception (freedom of arts and freedom of speech) evoked by the defendant in its defence, the court pointed out that this defence would not justify the registration of the disputed trademark, as these constitutional rights did not allow the defendant to register a similar sign for identical or similar goods. To the contrary, the appellant could rely on its constitutionally protected property rights in the trademark. This right outweighed the defendant’s constitutional rights.

The balance of rights therefore favoured the appellant with regard to the question of registering a trademark.

This decision is the first Federal Court of Justice decision on the cancellation of a trademark parodying a well-known mark. From the press release published (the full reasons for the decision had not been issued at time of writing), it can be seen that the court decided to take a rather strict approach to this kind of cases, meaning that it will not accept the parody exception when it comes to trademark registration – a welcome result for owners of well-known trademarks.

The decision is in line with the scope of protection of the rights of freedom of expression and arts. These rights intend to protect opinions, but do not establish commercially valuable property, as a trademark registration would.

What remains to be seen is whether the Federal Court of Justice, in the full reasons, will take the opportunity to develop the case law with regard to the use of trademark parodies.

In earlier decisions concerning potential trademark infringement by parodies, the German courts mostly took a rather liberal approach and decided in favour of the potential infringers. It was held that brand owners generally had to accept criticism of their company, including their brands, and that potential infringers could rely on the constitutionally protected rights of freedom of arts and expression. These rights outweighed the brand owner’s constitutionally protected property rights because the parodies were found to promote a public exchange of opinions.

Parodies were only found to be an infringement where they were not used to encourage an exchange of opinions, but to pursue commercial aims. Such limits to the parody exception are said to be reached when the main purpose of the parody is either to harm the trademark’s reputation or commercial value, or to promote the sale of the alleged infringer's goods by exploiting the good reputation of the brand owner’s trademark.

Morten Petersenn and Malte Wachsmuth, Hogan Lovells, Hamburg

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